President Joe Biden announced new student debt cancellation measures yesterday, which could benefit nearly 30 million Americans in the coming months.
But the measure has to survive the legal challenges.
The new proposal
- Includes cancellation of up to $20,000 in loan interest for borrowers whose debt has surpassed their initial loan amount.
- Includes debt forgiveness for those who have been repaying their loan for more than 20 years.
- Provides full forgiveness for the increased loan balance to individuals earning $120,000 or less, and married couples making $240,000 or less.
The timing
Biden’s proposal aims to appeal to progressives and young voters ahead of the November election as he is currently trailing Republican opponent Donald Trump.
The move also comes at a time when the price of attending classes at some colleges has surpassed $90,000 a year for undergraduates.
However, the plan is likely to face legal challenges from Republican lawmakers and state attorneys general, who argue the President is overstepping his authority.
In 2022, the Supreme Court blocked Biden’s initial plan of canceling $400 billion in student debt for about 43 million borrowers. The White House has since canceled $138 billion in student debt for 3.9 million borrowers under the SAVE, PSLF and IDR loan forgiveness and repayment plans.